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Food – the production, consumption and distribution of it – is generating a carbon footprint that has been overwhelming the planet. Every year, more than a third of all food produced ends up either in garbage bins or spoiling due to poor transportation and harvesting practices. What we eat, and how that food is produced, not only affects our health, but also has a major impact on the environment.

And as the world population continues to grow, amid decreasing biodiversity in our food supply and diminishing agricultural land, producing sufficient food to feed the population while ensuring the process does not negatively impact the environment is a tough act to balance.

Technology is key to a sustainable food future

Shen Ming Lee, author of Hungry for Disruption: How Tech Innovations Will Nourish 10 Billion By 2050, says the central question we need to answer is: How do we increase food production – both quantitatively and qualitatively – in an increasingly resource-scarce future?

"Time and time again, we've seen that technological innovation is a necessary path to advance an industry," Shen points out.

She explains that the food and agriculture industry is no different and that nourishing the global population, while meeting environmental and economic goals, requires that we "harness the power of science and technology to create a more sustainable, nutritious and innovative food future."

To address these challenges, the food and agriculture industry can leverage technology to create lasting solutions from fewer resources.

While AgriTech focuses on technical solutions – from farm to table – that optimize crop yields, FoodTech points to innovation that ensures food habits are sustainable. Together, the collective industry of FoodTech and AgriTech aims to reduce the burden on the environment while creating efficiencies via technology that benefit farmers, the planet and consumers.

Understanding the value behind AgriTech and FoodTech

When it comes to the opportunities these industries provide, Frédérique Carrier, managing director, head of Investment Strategy at RBC Wealth Management in London, emphasizes the need to understand the underlying trends and technology that are tackling the issues of food insecurity and climate change.

"Instead of looking at just AgriTech and FoodTech and finding companies that fit these labels, understanding the growth trends and how companies will benefit from them is very important," Carrier says.

She adds that the traditional ways in which the world has been producing and consuming food simply do not work anymore. "We have to factor in a growing population, less farm land due to urbanization, and extreme weather patterns which are not conducive for traditional means of food production." All of this further highlights the importance of adopting new technologies to mitigate these problems.

Shen points out that food and agriculture is a complex industry but one that needs more people talking and thinking about it.

"Especially for those not yet really in the thick of food and agriculture, [they] need to take the time to understand the nuanced issues that exist in this space," Shen adds.

She says this needs to be done in order to become more sophisticated investors in the agriculture industry and truly make an impact and generate a return.

Carrier also casts the spotlight on systems and regulatory bodies that rate companies in this space according to their credentials. She suggests relying on experts and organizations with the right resources to evaluate and conduct due diligence that individuals may not be able to do on their own.

"You have to make sure that these ratings are not just ticking boxes, but that there's really an understanding of how the business operates," she explains.

The growing appetite for innovative solutions

Carrier highlights how technology can help deliver more with less: "Solutions such as precision farming and gene technology can increase yields on agricultural lands."

She says supply chain efficiencies are also hugely important, because more than a third of the food produced on a farm gets lost or wasted and these losses – due to supply chain inefficiencies – would be enough to feed three billion people. Solutions, including "cold chains" and smart packaging, can help optimize various stages along the supply chain.

Shen also lists other AgriTech innovations worth keeping an eye out for: the digitization and automation of farms – how the Internet of Things (IoT), artificial intelligence and autonomous systems like robots and drones will revolutionize the farm – and novel farming systems in which indoor farming technologies and smart-home micro-gardens aim to change the current framework of field farming.

In terms of FoodTech, both Carrier and Shen point to alternative proteins such as plant-based products, which have a much lower environmental impact.

Shen says, "Advances in synthetic biology and food science have allowed us to produce plant-based, cell-based and fermentation-based sources of protein to meet our increasing protein demands."

According to Shen, novel food products – such as low-glycemic (low GI) products – that use biotechnology and food science to cater to consumers' appetite for a healthy and sustainable lifestyle, as well as the cultivation of underutilized superfoods and highly functional crops, "will also bring a whole host of innovation opportunities."

You are what you eat

Our food choices and dietary patterns affect the environment. The food system underpinning the world's current dietary patterns is responsible for approximately 21 percent to 37 percent of total greenhouse-gas emissions, which is a major driver of climate change, even without considering other environmental effects.

According to a University of Oxford study, meat and other animal products account for more than half of food-related greenhouse-gas emissions, despite providing only a fifth of the calories we consume.

Below are some suggestions from Shen on what consumers can do to reduce their carbon footprint:

  • Eat less meat – Eating more plant-based protein can dramatically reduce your contribution to overall greenhouse-gas emissions.
  • Eat a more diverse array of foods - Seventy-five percent of the world's food supply comes from just 12 plant and five animal species. Greater diversity in our diets is essential, as the lack of variety in agriculture is both bad for nature and a threat to food security.
  • Stop food wastage – Buy only what you need; upcycle and repurpose “old food"; plan and use up what is in your refrigerator.
  • Buy and shop local – Buy produce and meat from local shops and farms that are as close to you as possible, to reduce food miles. Your food will also be fresher, as the nutritional value of our food degrades the longer it travels from its source.
  • Be conscious of plastic use when purchasing food – Bring a reusable bag when you shop, and opt for packaging-free fruit and vegetables at the market.

The future of food

The plate of the future is going to look vastly different from that of the present, as Carrier explains: "Plant-based proteins are likely to continue to gain market share as technology improves and prices fall."

She believes food companies that acted on the opportunity early and invested in alternative proteins will have a first-mover advantage in terms of recipe, processing technology and the distribution networks they use.

"Global, multi-brand food companies are starting to invest as well, and while their plant-based businesses are not yet big enough, they will keep growing," Carrier says, adding that the valuation gap between plant-based alternative producers and these traditional food companies is expected to decrease somewhat over the years.

According to Carrier, the companies that develop sustainable technology (SusTech) to tackle the challenges will have secular growth opportunities. "Investors should be on the lookout for these companies and include some in their portfolios."

Shen also expects food production to become more localized and efficient as a result of technological innovations such as agricultural robots, precision agriculture and indoor- farm technology.

And on the consumption front, she sees more people "eating with sustainability in mind, replacing meat consumption with meat alternatives or cultured meat, eating more local and seasonal, and reducing how much food [they] waste."


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